Expanding Economic Opportunity for More Americans Bipartisan Policies to Increase Work, Wages, and Skills Foreword by HENRY M. PAULSON, JR. and ERSKINE BOWLES Edited by MELISSA S. KEARNEY and AMY GANZ Expanding Economic Opportunity for More Americans Bipartisan Policies to Increase Work, Wages, and Skills Foreword by HENRY M. PAULSON, JR. and ERSKINE BOWLES Edited by MELISSA S. KEARNEY and AMY GANZ FEBRUARY 2019 Acknowledgements We are grateful to the members of the Aspen Economic Strategy Group, whose questions, suggestions, and discussion were the motivation for this book. Three working groups of Aspen Economic Strategy Group Members spent considerable time writing the discussion papers that are contained in this volume. These groups were led by Jason Furman and Phillip Swagel, Keith Hennessey and Bruce Reed, and Austan Goolsbee and Glenn Hubbard. We are indebted to these leaders for generously lending their time and intellect to this project. We also wish to acknowledge the members who spent considerable time reviewing proposals and bringing their own expertise to bear on these issues: Sylvia M. Burwell, Mitch Daniels, Melissa S. Kearney, Ruth Porat, Margaret Spellings, Penny Pritzker, Dave Cote, Brian Deese, Danielle Gray, N. Gregory Mankiw, Magne Mogstad, Wally Adeyemo, Martin Feldstein, Maya MacGuineas, and Robert K. Steel. We are also grateful to the scholars who contributed policy memos, advanced our understanding about these issues, and inspired us to think creatively about solutions: Manudeep Bhuller, Gordon B. Dahl, Katrine V. Løken, Joshua Goodman, Joshua Gottlieb, Robert Lerman, Chad Syverson, Michael R. Strain, David Neumark, Ann Huff Stevens and James P. Ziliak. The production of this volume was supported by many individuals outside of the Aspen Economic Strategy Group organization. Andy Morimoto was instrumental in helping to facilitate the working group process and reviewing many iterations of this volume. We are especially grateful to the staff of AESG members who supported the working group process: Akura Anderson, Spencer Deery, Meredith B. Didier, Priscila Dolendi, Neeta D. Gropper, Erika Gruppo, Jim Hock, Leslie Miller, Rebecca Neale, Gina Ojile, Zinnia Orosa, Wilhelmina Sanford, Olivia Somdecerff, amd Sharon Whitlock. Dwyer Gunn provided superb editing and proofreading support, Steve Johnson and Sogand Sepassi designed the cover and layout, respectively. We also thank Chris Cook for his masterful chart-making skills, John Soriano, for his helpful research assistance, and Lucy Gibson for proofreading. We thank the founding sponsors of the AESG whose steadfast support has made this work possible: Paula and James Crown, Robert and Gillian Steel, Roy and Manisha Kapani, Francis and Dionne Najafi, Antonio and Sabrina Gracias, and Troy Carter. The institutional support and guidance provided by The Aspen Institute has been invaluable. We are especially grateful to President Emeritus Walter Isaacson, President and CEO Dan Porterfield, Aspen Institute Trustee Robert K. Steel, and Chairman James S. Crown for their support of this program. Finally, this book would not be possible without the excellent stewardship of Melissa S. Kearney and Amy Ganz, both of whom have ably guided the AESG and co-edited this volume. Henry M. Paulson, Jr. Erskine Bowles Melissa S. Kearney Co-chair Co-chair Director CO-CHAIRS Henry M. Paulson, Jr. Erskine Bowles Founder and Chairman President Emeritus The Paulson Institute The University of North Carolina ASPEN INSTITUTE CHAIRMAN CHAIRMAN EMERITUS James S. Crown Robert K. Steel Chairman and CEO Partner and CEO Henry Crown and Company Perella Weinberg Partners ASPEN INSTITUTE PRESIDENT PRESIDENT EMERITUS Daniel Porterfield Walter Isaacson President and CEO Distinguished Fellow The Aspen Institute The Aspen Institute DIRECTOR DEPUTY DIRECTOR Melissa S. Kearney Amy Ganz Neil Moskowitz Professor of Economics The Aspen Institute The University of Maryland MEMBERS Wally Adeyemo Ben Bernanke Senior Adviser Distinguished Fellow in Residence Center for Strategic & Brookings Institution International Studies Joshua Bolten Kelly Ayotte President and CEO Perkins Bass Distinguished Visitor, Business Roundtable Nelson A. Rockefeller Center for Public Policy Ursula Burns Dartmouth College Executive Chairman VEON Group Mary Barra Chairman and CEO Sylvia M. Burwell General Motors Company President American University Lanhee Chen Jason Furman David and Diane Steffy Research Fellow Professor of the Practice of Economic Hoover Institution Policy Stanford University John F. Kennedy School of Government David Cote Harvard University CEO Timothy Geithner GS Acquisitions Holding Corporation President James S. Crown Warburg Pincus LLC Chairman and CEO Austan Goolsbee Henry Crown and Company Robert P. Gwinn Professor of Economics Chairman of the Board of Trustees Booth School of Business The University of Chicago The Aspen Institute Danielle Gray Ray Dalio Chief Legal Officer and Corporate Founder, Co-Chief Investment Officer, and Co-Chairman Secretary Bridgewater Associates LP Blue Cross Blue Shield of North Carolina Mitchell E. Daniels, Jr. Reed Hastings President CEO and Co-founder Purdue University Netflix Brian Deese Keith Hennessey Global Head of Sustainable Investing Lecturer BlackRock Graduate School of Business Stanford University Sue Desmond-Hellmann CEO Marillyn Hewson Bill and Melinda Gates Foundation Chairman, President, and CEO Lockheed Martin Martin Feldstein George F. Baker Professor Fred Hiatt of Economics Editorial Page Editor Harvard University The Washington Post Laurence D. Fink Doug Holtz-Eakin Chairman and CEO President BlackRock American Action Forum Kristin Forbes Glenn Hubbard Jerome and Dorothy Lemeson Dean and Russell L. Carson Professor Professor of Management and of Finance and Economics Global Economics Columbia Business School Sloan School of Management, Greg Ip Massachusetts Institute of Technology Chief Economics Commentator The Wall Street Journal Neil Irwin Janet Murguía Senior Economic Correspondent President and CEO The New York Times UnidosUS Joel Kaplan Phebe Novakovic Vice President for Global Public Policy Chairman and CEO Facebook General Dynamics Neel Kashkari Michael Nutter President David N. Dinkins Professor of Federal Reserve Bank of Minneapolis Professional Practice in Urban Melissa S. Kearney and Public Affairs Columbia University School of Neil Moskowitz Professor of Economics International and Public Affairs University of Maryland James Owen Ellen Kullman Chairman & CEO Emeritus Former Chair and CEO Caterpillar Inc. DuPont John Podesta Edward Lazear Founder and Board Member The Davies Family Professor Center for American Progress of Economics Graduate School of Business Ruth Porat Senior Vice President and Chief Morris Arnold and Nona Jean Cox Financial Officer Senior Fellow Google Hoover Institution Stanford University James Poterba Mitsui Professor of Economics Maya MacGuineas Massachusetts Institute of Technology President Committee for a Responsible President Federal Budget National Bureau of Economic Research N. Gregory Mankiw Penny Pritzker Robert M. Beren Professor Founder and Chairman of Economics PSP Partners Harvard University Bruce Reed Magne Mogstad CEO and Co-founder Gary S. Becker Professor in Civic LLC Economics and the College Kenneth C. Griffin Department Robert Rubin of Economics Co-Chairman Emeritus University of Chicago Council on Foreign Relations Marc H. Morial Stephen Schwarzman President and CEO Chairman, CEO, and Co-founder National Urban League Blackstone Margaret Spellings Kevin Warsh President Shepard Family Distinguished Visiting University of North Carolina System Fellows in Economics Hoover Institution Gene Sperling Stanford University Former Director National Economic Council Janet L. Yellen Distinguished Fellow in Residence William Spriggs Brookings Institution Chief Economist AFL-CIO Jeffrey Zients CEO Robert K. Steel The Cranemere Group Limited Partner and CEO Perella Weinberg Partners Robert Zoellick Chairman Lawrence H. Summers AllianceBernstein Charles W. Eliot Professor and President Emeritus Harvard University Phillip Swagel Professor in International Economic Policy University of Maryland School of Public Policy Table of Contents Foreword .............................................................. 1 Henry M. Paulson, Jr. and Erskine Bowles Working Group Process and Members ................................... 3 Introduction ........................................................... 5 Melissa S. Kearney and Amy Ganz Part I: Developing Human Capital for the Modern, Global Economy DISCUSSION PAPER A Policy Agenda to Develop Human Capital for the Modern Economy ..... 16 Glenn Hubbard, Austan Goolsbee, and Amy Ganz POLICY MEMOS What Works in Career and Technical Education (CTE)? A Review of Evidence and Suggested Policy Directions .............................. 40 Ann Huff Stevens Scaling Apprenticeship to Increase Human Capital....................... 56 Robert I. Lerman The Challenges of Leveraging Online Education for Economically Vulnerable Mid-Career Americans ...................................... 76 Joshua Goodman Part II: Increasing Prime-Age Labor Force Participation DISCUSSION PAPER A Policymaker’s Guide to Labor Force Participation ...................... 86 Keith Hennessey and Bruce Reed POLICY MEMOS Restoring Economic Opportunity for “The People Left Behind”: Employment Strategies for Rural America ..............................100 James P. Ziliak Policies to Reintegrate Former Inmates Into the Labor Force